Road Tax Rules Change

If you are not yet aware or require some clarification, the following page contains all you need to know about the forthcoming Vehicle Road Tax cost changes coming into effect in the UK.

You need to be aware of these changes as if you are planning on buying a brand new car, as it could cost you money.

What are the changes to Vehicle Road Tax?
For brand new cars registered on or after 1st April 2017 a new one off ‘First Year Rate’ cost is charged for the first year based upon the CO2 emissions of the vehicle. Every year there after the vehicle will be charged an annual Road Tax of £140. Cars that cost in excess of £40,000 will have to pay a supplement of £310, making their yearly cost £450 over the first 5 years.

So in fact, the rate of £140 may in some cases be lower than was previously paid for larger vehicles!

Unfortunately, it is buyers of smaller, more economical brand new cars that will face the biggest tax increase, which in some cases is more than nine times what they would be paying now. Of course owners of higher polluting cars will still pay more.

Are older cars affected by the changes to Vehicle Road Tax?
The new rules will not affect older cars registered before the change date and will not affect them retrospectively. So if you purchased your car previously based on its CO2 emissions you will not be affected. Good news!

This includes any new car as long as it is registered before 1st April 2017. So pre-registered cars will not be affected by these changes if registered prior to the change date.

On all these instanced tax will continue to be calculated using the old system of CO2 emissions, meaning that in the vast majority of cases you'll be better off.

Should I buy a new car before the Vehicle Road Tax changes in April?
So this leads on to the big question is, should I buy a new car before the Vehicle Road Tax changes on 1st April 2017? Unfortunately, there's no simple answer. It really does depend upon what you are buying.

As an approved main dealer for Vauxhall, Peugeot, Skoda, Mazda, Kia and Ford, we at Underwoods take our responsibilities to our customers very seriously. Our best recommendation is to get down to your chosen dealership and ask for the cost differences.

New Tax Rules and Charges

New VED system for cars registered from April 2017

First Year Rate1st Reg FeeStandard Rate*Single 6 month
over 255£2,000£55£140N/A
*cars over £40,000 pay £310 supplement for 5 years. Electric £0, Alternative £30, Petrol/Deisel £140.
The first time you tax a vehicle on or after 1 April 2017 with a list price (published price before any discounts) of more than £40,000, you’ll pay the rate based on CO2 emissions.